In the event of conflicting laws, which law prevails for a Moes Southwest Grill franchise?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- The laws of the State of Indiana supersede any provisions of the Franchise Agreement and any the other agreements, or Georgia law, if these provisions are in conflict with Indiana law.
-
- No release language stated in the Franchise Agreement relieves us or any other person, directly or indirectly, from liability imposed by the laws concerning franchising of the State of Indiana.
-
- Notwithstanding the terms of Item 12 of the Disclosure Document and Section 4 (Reserved Rights) of the Franchise Agreement (as applicable), we will not compete unfairly with you within a reasonable area.
-
- Notwithstanding the terms of Section 13.1 (Indemnification) of the Franchise Agreement, you will not be required to indemnify the GoTo Foods Parties for any liability caused by your proper reliance on or use of procedures or materials provided by us or caused by our negligence.
-
- Section 15.4.B. (Restrictive Covenants: Post Term) of the Franchise Agreement is revised to limit the geographical extent of the post-term covenant not to compete to an area of reasonable size, for all franchises sold in the State of Indiana.
-
- The prohibition by Indiana Code § 23-2-2.7-1(7) against unilateral termination of the franchise without good cause or in bad faith, good cause being defined therein as "... a material breach of the franchise agreement...," supersede any contrary provisions contained in Section 17 (Default and Termination) of the Franchise Agreement in the State of Indiana.
-
- The provisions of the Franchise Agreement relieving both parties from liability for punitive damages will not apply to franchises offered and sold in the State of Indiana.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, the governing law can vary depending on the location of the franchise and the specific legal issue. For instance, the standard Franchise Agreement specifies that Georgia law governs the agreement. However, addenda for certain states like Indiana, California, Illinois, North Dakota, and Rhode Island stipulate that their state laws supersede conflicting provisions of the Franchise Agreement. This means that if a clause in the Franchise Agreement conflicts with the laws of these states, the state law will take precedence.
For example, the Indiana Addendum states that Indiana law supersedes any conflicting provisions in the Franchise Agreement or Georgia law. Similarly, the California Addendum notes that certain provisions in the Franchise Agreement, such as those requiring application of Georgia laws or those related to covenants not to compete, may not be enforceable under California law, and California law will control in such cases. The Rhode Island Addendum specifically mentions that any provision restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of other state's laws is void with respect to a claim enforceable under the Rhode Island Franchise Investment Act.
These state-specific addenda reflect an effort to comply with local franchise laws, which often aim to protect franchisees. Prospective franchisees should carefully review the addendum (Schedule D) applicable to their state to understand which provisions of the Franchise Agreement may be superseded or modified by local law. This is particularly important for issues such as termination rights, non-compete clauses, and dispute resolution, as these are frequently addressed in state franchise laws. Franchisees should consult with legal counsel in their state to fully understand their rights and obligations under both the Franchise Agreement and applicable state laws.
In summary, while the Moe's Southwest Grill Franchise Agreement is generally governed by Georgia law, state-specific addenda modify this by ensuring that local franchise laws prevail in case of conflict, offering additional protection to franchisees in those states. This multi-layered legal framework requires careful consideration by potential franchisees to ensure compliance and understanding of their rights.